A Company's CFO Wants to Maintain a Target Debt-To-Equity Ratio

question 21

Multiple Choice

A company's CFO wants to maintain a target debt-to-equity ratio of 1/4. If the WACC is 18.6%, and the pretax cost of debt is 9.4%, what is the cost of common equity assuming a tax rate of 34%?

• A) 19.90%
• B) 20.90%
• C) 21.70%
• D)22.73%

Appreciate the significance of social identity in group behaviour and attitudes.

Explain the mechanisms of collective behaviour and how social protests happen.

Evaluate the evidence supporting realistic conflict theory and its limitations.

Understand the implications of social dilemmas and their impact on the commons.

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Definitions:

Blue Jeans

Denim trousers that are typically dyed with indigo and have become a significant fashion item and symbol of Western culture.

Tax

Mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund public expenditures.

Competitive Market

A market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold.

Taxi Rides

Services offered by vehicles, typically cars, for hire to transport individuals from one location to another, based on a fare.